Summary
Grubhub will pay $25 million to settle charges from the FTC and Illinois AG alleging it misled diners about meal costs, drivers about earnings, and falsely advertised non-partnered restaurants.
The agencies accused Grubhub of deceptive practices, such as hidden service fees that inflated prices, overstating driver pay potential, and listing up to 325,000 unaffiliated restaurants.
Grubhub will also implement changes to disclose full delivery costs, accurately advertise pay, and list only consenting restaurants.
Grubhub denied the allegations but agreed to settle, with penalties reduced from $140 million due to its financial position.
Not necessarily, the government may do restitution. But when the individual distribution is not going to lead to meaningful recovery for anyone, it’s better for the government to add the money to their general fund rather than dole it out.
And to anticipate another issue, maybe the governments could have recovered more or even what the actual damages were, but lawsuits are expensive, even for the states and feds, and there a lot of issues that need attention. Trials are risky too. And in a lot of cases, there’s a legal max on the fine/recovery.
I think, and maybe I’m just jaded, but I think you might be putting entirely too much faith in the government
As an old wise sage from accounting once said, ‘fuck you pay me’
I just know the process and know what an uphill battle it is every time. There is so much damn fraud constantly.